Where do the cost savings come from in Rheocasting?

We have seen more and more car makers enter the automotive sales crisis. We have already seen the protests from Volkswagen workers. And even more cost-cutting is coming to the supply chain. One thing we have known for years is that if the OEM whispers cost-cutting, it amplifies down the supply chain. So, it is now a bet if they hit your foundry still in 2024 or the beginning of 2025.

So, it is urgent to find cost-cutting measures in your foundry while you have a massive drop in revenue due to the low sales numbers. In addition, quality is not allowed to suffer because of the measures you take. That sounds like an impossible puzzle.

Let’s first look at the current purchasing process. In HPDC, the cost of the part is calculated itemized. In contrast to sand casting, where the cost is multiples of the part weight, in HPDC alloy, tool and operation costs are calculated separately and must be shared with Tier 1 or OEM so they know exactly how much each position costs.

The cost breakdown is then in a large table compared with all foundries. Some even build up an imaginary supplier based on the cheapest price for each item, which now becomes the benchmark. An imaginary foundry that could never sustain operation is now a bar you must pass to get new business.

Cheap to buy, expensive to maintain

You know it from the cheap stuff from platforms like Temu, Shein and AliExpress; these things break quickly or do not deliver the promised features. The same is valid for foundry equipment. A tool without a conformal cooling build for microspraying is more expensive. However, the total cost of ownership of that tool is lower; let me explain. Your tool’s thermal management allows for a better solidification path, preventing porosity. Also, because of the lower fatigue load, you do not need two people per shift to grind the heat cracks.

In summary, when using the cheapest equipment, the reachable part quality is lower, more work is required to maintain the specifications, and you’re one unchecked part away from an expensive Q-Help program. All these things are reflected in the operational costs. So, initially, squeezing cents will cost you a lot in the long run. But that is often a different account in the purchasing department.

How can you actually save costs?

From the example above, you can already see that if you consider the initial purchase of equipment as an investment instead of an expense, you have achieved the first step to actually change your situation. When you buy a stock, you look for the cheapest one you can find and plan on retiring early from that stock. So, why do it in your purchasing process?

I’m entirely on your side; effective cost-cutting measures are not easy and require a lot of cooperation along the supply chain. Quite often, there are specifications in the way of achieving better products for less, but they cannot be circumnavigated.

When we look at the cost savings Rheocasting can bring to various parts, we see that it allows for cheaper alloys with a much higher recycled content. The tools live around double as long as in HPDC, and you can even build a smaller tool, as you don’t need such a big die-casting machine.

You need to redesign the gate to accommodate the slurry’s laminar filling rate. The big upside is that you can utilize the long flow length of Rheocasting and reduce the projected area massively. That allows for multiple cavities on the same machine size as HPDC or a machine size reduction of around 30%. You just need to ensure good thermal management of the die. It’s nothing crazy, but it’s the same level as you need for HPDC castings with micro spray. Per shot, that tool will be cheaper than the cheapest option from any third-world tool maker.

The same principle applies to the alloy. Most HPDC alloys require a low iron content of around 0.2%. Low iron post-consumer scrap is rare and more expensive than primary. However, if you increase that limit to 0.5%, you can easily go from around 20 to 40% of recycled content to above 95%. The alloy is even cheaper as the scrap cannot be used for anything besides Rheocasting. Rheocasting works way better with higher iron contents and does not form the detrimental Al-Fe-Si needles.

Now you know how to cut your operation costs. It requires intelligent solutions and a lot of business development. If you pick an alloy like the 226 or the A380, you do not need to change the specification. This cost-saving also increases your margin; I’m just saying. If you want to learn more, schedule a free Consultation Call below.